DOE Petroleum Inventories - A Build like API but prices reverse up

On Wednesday as usual at 3:30pm GMT (10:30am EST) the Department of Energy Inventory figures were released. These follow the less watched API figures from the night before. The numbers had indicated a draw for the past few weeks, which is bullish for Crude, however this week's API figures on Tuesday night was a build, or more supply and is generally bad for prices. This week's DOE Inventory figures also indicated a Build, in all 3 components of the energy complex : Crude, Gasoline and Distillates. Here are the numbers:

DOE CRUDE: +1.03M V -2ME; GASOLINE: +1.9M V -1ME; DISTILLATE: -540K V -1.5ME; UTILIZATION: 85.5% V 84.2%E- Distillate demand +25K bpd to 3.8M bpd - Gasoline demand -125K bpd at 8.83M bpd

So basically a +3029 on Crude, a +3163 deviation on Gasoline, and a smaller +959 deviation on Distillates. So all 3 components agreed. Crude Oil shot down some 80 ticks as a positive deviation or build of supply will do to price. Prices then shot back after 10 seconds to the 61% of the initial news spike reaction and started to turn back down, however there was no continuation, prices turned back up and the tight stop used on the afterspike was hit. This can happen from time to time trading these events and this is why it is essential to use tight stops, however it is still a high probability trade and it works alot more often than if fails. So why did it fail? Well Crude has been selling off from Nov. 11th and has come down nearly $8, that is nearly a 9% move, sometimes the market makers do use the news to take profit on existing positions. If you had been short the past 2 weeks and you knew that thanksgiving holiday was the next day and few traders would be around for friday, why not take profit on your short when price spikes down after the news. Then the profit taking builds up steam and everyone rushes to the exits, some momentum traders sense this and also get into long positions to take advantage of the volatility. It doesn't matter, perhaps thru time in the market you become aware of when a situation like this is developing and certainly after your small conservative stop loss is hit, you are free to enter into another trade and promptly make profit again. It is when the trader holds on because they think the market must continue to move short because of the news that they get into trouble, as the market will squeeze those shorts hard and fast. Don't get caught out!